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What is a nest egg and why should I have one? 

A “nest egg“, traditionally called, refers to a bundle of financial assets saved for the future. These assets can either be sold and/or generate income for you. Let’s investigate pros and cons of your nest egg. 

 

Your financial asset (nest egg) can include, cash, term deposits, property and shares.

 

Once you start your career and earn enough income to be able to start saving, is the right time to start thinking about saving money for a rainy day. Working hard and generating adequate cash flow helps you build up your little nest egg over time.

The aim of the nest egg is to provide passive income when you can’t or don’t want to work at your retirement phase. A commercial property providing you with rent or your share portfolio providing dividends are examples of rewards from your savings.  

Why or Why Not?

Perhaps you are not long-term focused and prefer to spend all your funds now rather than save some for later – this is a lifestyle choice you can make, which is not wrong at all if you understand possible future consequences, which are: 

  • reduced government pension support in the future
  • you are unable to work and generate income to support your preferred lifestyle e.g. an illness event or you lose your job through changes to the economy
  • you are unable to pass on assets to children or support other family members

A passive income generating nest-egg provides you with the ability to choose your work schedule to suit your health and lifestyle in the future. It might give you enough freedom to focus on the things that really matter to you.

 

Some easy takeaway tips

-Savings can be easily set up with a little analysis of your situation and long-term goals

-Talk to us about your cash flow and the right amounts for your nest egg for now

-Set up an amount your nest egg should aim for – when you break it down you will be surprised how you can get there rather than focussing on a large amount at the end

-Understand that some assets don’t potentially generate as much income as others, so this will affect how much you may need to save.

-The earlier you start the better

 

It is important to make informed investment decisions for your retirement. To suit your lifestyle, risk tolerance and goals, our advisors look at a strategic vision for your holistic financial situation.  

 

Published February the 21st 

 



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Accountants & Financial Planners - Mortgage & Finance Services
IMPORTANT NOTICE

On this entire website, information is of a general nature only and has been provided without taking account of your objectives, financial situation or needs. Because of this, we recommend you consider, with or without the assistance of a financial adviser, whether the information is appropriate in light of your particular needs and circumstances.

No representation is given, warranty made or responsibility taken about the accuracy, timeliness or completeness of information sourced from third parties. Because of this, we recommend you consider, with or without the assistance of a financial adviser, whether the information is appropriate in light of your particular needs and circumstances.

Anthony Klatt, John Grocke and Mathew Wilkshire are authorised representatives of Paragem Pty Ltd. Paragem Pty Ltd ABN 16 108 571 875, is the holder of Australian Financial Services License number 297276 and these authorised representatives trade as Johnston Grocke.

AG Finance Group is a Corporate Credit Representative (396686) of BLSSA Pty Ltd, ACN 117 651 760 (Australian Credit License Number 391237).